TL;DR · 30-second read
The Short Version
The internet travels between countries through cables on the seabed. New cable projects in the waters around the Middle East have stopped, and a ceasefire between the US and Iran has not restarted them.
That matters because Gulf countries are spending heavily on huge computer centers for artificial intelligence, hoping to rely less on oil. Those centers need reliable links to the outside world.
Restarting will be slow. The seabed must be checked for mines and specialist ships brought back, which could take months. Insurers also want lasting peace first.
The Financial Times reported in June 2026 that a halt to subsea cable projects in the Middle East is set to persist despite the US-Iran ceasefire. Alan Mauldin, research director at data group TeleGeography, said all subsea cable projects in the Strait of Hormuz and the Gulf had been “delayed indefinitely.” Ryan Sher, chief operating officer of West Indian Ocean Cable Company (WIOCC), a partner on the Meta-led 2Africa network, said cable laying in the Red Sea was “on pause” until security is assured.
Planned or partially laid systems that cross or pass through the strait include the proposed $700mn WorldLink network connecting Gulf states, Fibre in Gulf, owned by Qatari telecoms group Ooredoo, and Sea-Me-We 6, which links south-east Asia to Europe.
Executive Summary
New international cable capacity in and around the Gulf has stopped moving forward, and the end of active hostilities has not been enough to restart it. Resumption depends on seabed surveys, demining, the return of diverted cable-laying ships, and insurance terms that are likely to stay restrictive until there has been a sustained period of peace and security.
The timing matters because Gulf states have invested heavily in data centers, cloud services and AI as part of their push to diversify beyond oil. Those ambitions rest on reliable connectivity as much as on capital, power and chips. Energy and geopolitical analyst Masha Kotkin said the stalled projects “put a question on the ambitions of countries in the Gulf Cooperation Council in becoming cloud computing and AI powerhouses.”
The near-term risk is more likely to be delay than retreat. Kotkin expects companies to stay with existing investments but possibly defer new spending, leaving projects still in planning most exposed. For anyone building or buying capacity in the region, route availability has become a question to settle early rather than assume.
A Campus Is Only as Good as Its Routes
A data center campus can be financed, powered and filled with chips inside one country’s borders. A regional hub has a further requirement: its data must be able to reach customers beyond those borders. For much of that traffic, the path runs along the seabed, through waters that no single campus developer controls. That is the gap the current halt exposes.
WorldLink illustrates the mechanism. At a proposed $700mn, the network was intended to connect Gulf states to one another, and it sits among the systems affected by a region-wide delay that Mauldin describes as indefinite. Its cost to the region is not limited to its price tag. A postponed route also holds back the capacity and redundancy, meaning alternative paths when one fails, that planners of the facilities around it might otherwise count on. The same logic applies at a larger scale to Sea-Me-We 6 and the Middle East links of 2Africa, which tie the region to Asia, Africa and Europe.
Exposure will not be uniform. A campus serving mainly domestic users is less dependent on new international capacity than one whose business case rests on selling compute across regions. The second model is the one implied by hub ambitions, which is why cable delays bear directly on those plans. The people most affected are developers and cloud operators with export-oriented capacity still in planning, along with the governments that have tied economic diversification to that outcome.
A Ceasefire Does Not Restart a Cable Ship
The restart sequence is physical and contractual as well as diplomatic. The ocean floor must be surveyed and demined. Cable-laying ships diverted during the conflict must be reassigned to the region, which analysts say could take months. Insurance clauses that forced operators to pause are likely to stay in place until there has been a sustained period of peace and security.
That last condition may prove the hardest to schedule, because it depends on elapsed calm rather than on a task that can be completed. Reports in March claimed that Alcatel Submarine Networks had issued force majeure notices, the contractual declarations that events beyond a party’s control prevent performance, for all operations in the Gulf. Such constraints help explain why a ceasefire and a reopened strait have not translated into renewed work at sea.
Perception adds a slower variable. Mostafa Ahmed, senior researcher at Emirati think-tank the Al Habtoor Research Centre, said that even after the strait’s reopening, “in the eyes of infrastructure investors it now carries the reputation of a fragile digital chokepoint, and that perception will not unwind quickly.” This is a forecast about investor behavior, not yet a measured capital outflow, but it should be tested against spending decisions in the months ahead.
Security Moves Onto the Buyer’s Checklist
The strain extends beyond the Gulf. In 2024, three Red Sea cables were severed by an anchor dragged from a cargo ship sunk by Houthi rebels in Yemen, forcing telecoms companies to reroute data. Sher said WIOCC had made a “massive investment” in the Red Sea section of 2Africa that runs towards Europe, and that this part of the network is now “effectively not usable for us.” Iran’s threat in May to impose fees on cables passing through the strait added to the unease. Analysts doubt it could be enforced, but they read it as a sign that Tehran views such infrastructure as a strategic asset.
Commercial priorities are shifting in response. Prysmian, an Italian cable manufacturer that operates in the Middle East, said customers are increasingly concerned about the security of subsea cables, not only their quality and price. Operators have long sought diverse routes to avoid chokepoints, and the conflict has made that search more urgent. WIOCC is examining routes through Africa that reduce reliance on the Middle East, as well as land-based options.
The scale of the disruption should be stated carefully. Ahmed noted that only a small fraction of international telecommunications traffic passes through the strait, while calling it “a critical . . . digital artery” and warning of “ripple effects” across Africa, Asia and parts of southern Europe, with India particularly exposed. Sher’s description of a mood of “hopelessness” reflects an operator with capital tied up in affected routes, while Kotkin’s expectation that companies will stay with existing investments points to a more gradual effect. Both can hold: a contained share of global traffic can still be decisive for the region seeking to become a hub.
Background
Subsea cables carry data between countries and continents, and operators have long tried to spread their networks across multiple corridors so that no single chokepoint can cut them off. The Middle East has been a key junction: several major cables pass through the Strait of Hormuz, while the Red Sea provides a crucial link towards Europe. The Meta-led 2Africa network connects Africa to Europe and the Middle East, and WIOCC is among its partners.
Countries in the Gulf Cooperation Council, the regional bloc of Gulf states, have invested heavily in data centers, cloud services and AI to diversify their economies beyond oil. Those plans have developed alongside growing concern about cable security, including the 2024 Red Sea cuts and incidents of cable sabotage in Europe in recent years, which have added to a sense among operators that subsea networks are becoming more vulnerable to geopolitical instability. Source: Stalled subsea cable projects threaten Middle East digital ambitions, Financial Times: on suspended cable work in the Strait of Hormuz, the Gulf and the Red Sea, and the risk to the region’s AI and cloud plans.Sources